A French state prosecutor has launched a preliminary judicial investigation into the workings of the United States' "Echelon" spy system of satellites and listening posts, the prosecutor's office said Tuesday. Echelon, set up during the Cold War, can intercept millions of telephone, fax and e-mail messages, and Washington has been accused of using it for economic espionage against its allies, a charge it denies. The investigation, which could spark a diplomatic quarrel with the U.S.

A jury Friday awarded Avery Dennison Corp. at least $40 million in damages from a Taiwanese rival that stole trade secrets from the Pasadena-based adhesives maker. Jurors in federal court in Cleveland deliberated nearly seven hours before finding officials of Taiwan-based Four Pillars Ltd. liable for bribing a senior research engineer at Avery Dennison to get access to confidential information about adhesive formulas and label technology.

The case is about glue, adhesives, disposable-diaper tape and the high technology of no-lick stamps. It is also, federal prosecutors contend, about criminal espionage. In the first trial to come from the Economic Espionage Act of 1996, two executives with a Taiwanese firm are accused of stealing industry trade secrets from Pasadena-based label-maker Avery Dennison Corp., paying an Avery researcher $160,000 to spirit out secrets.

The United States and Britain have offered reassurances that their giant eavesdropping network is not involved in economic espionage, a European Union commissioner testified Thursday. European Enterprise Commissioner Erkki Liikanen testified during a special European Parliament debate that he received a letter from the U.S. State Department and Britain. Both governments denied accusations that the American-led Echelon spy network is used to snoop on Europeans and European businesses. "The U.S.

President Bush, speaking at the swearing-in of Robert M. Gates to be the 15th director of the Central Intelligence Agency, said Tuesday that the CIA must change "as rapidly and as profoundly as the world itself has changed." Bush said that the agency must evolve from its Cold War past to confront the problems of the 21st Century, including weapons proliferation, economic espionage, terrorism and drug trafficking.

Authorities tried Monday to determine if the suspicious disappearance of a laptop computer belonging to the chief executive officer of Qualcomm Inc. was a simple case of thievery or an act of economic espionage. Laptops, because of their value and small size, are frequent and obvious targets for theft, but the disappearance of a computer belonging to CEO Irwin Jacobs from a hotel conference room in Irvine instantly became a top priority for local authorities, Police Lt. Sam Allevato said.

A Mendocino County Superior Court jury awarded $12.6 million to two former State Farm Insurance agents blocked from selling competing policies to former customers after State Farm fired them in 1999. After concluding State Farm acted with malice toward former agents John W. Wier and Richard L. Pyorre, the jury late Monday decided State Farm should pay $6 million in punitive damages to the men. The punitive damages supplement a $6.

His boss is James T. Riady, the elusive billionaire who refuses to answer Senate investigators' questions about his relationship with President Clinton. Another of his longtime superiors was John Huang, the fallen Democratic fund-raiser who also is refusing to talk. In fact, James E. Per Lee, president and chief executive officer of LippoBank California, has spent more time with Riady and Huang than any federal agent or congressional staffer assigned to the campaign finance investigations.

President Clinton came out strongly in support of the embattled Central Intelligence Agency on Friday, rejecting calls by the CIA's growing legion of critics for deep budget cuts if not outright elimination of the agency. In a speech under a broiling noontime sun outside CIA headquarters here, Clinton told hundreds of CIA employees that cutting the intelligence budget simply because the Cold War is over would be akin to "canceling your health insurance when you're feeling fine."

The FBI and the inspector general of the National Aeronautics and Space Administration are investigating potential espionage and criminal activity at a NASA research center in Mountain View that specializes in aeronautics and computer science. A 30-member management review team, which included aeronautics, security and legal experts, spent about a week in August at Ames Research Center.